captioning sponsored by comedy central captioned by media access group at wgbh access.wgbh.org captioning sponsored by comedy central . ( cheers and applause ). >> stephen!

stephen! stephen! >> stephen: thank you so much. welcome to the report, everybody. thank you for joining us. thank you, ladies and gentlemen. please, sit down. folks, thank you for being in here, out there, i want to welcome everybody here. nation, ever since president obama won re-election in november, republicans have been pinning their hopes for 2016 on new jersey governor and grown-up campbell's kid chris christie. sadly, a new scandal has exploded that could derail christie's ambitions. he was recently caught on tape blatantly lying to one of his constituents about his past. >> this is your time here. get the microphone. >> what's your favorite tv show.

i like to watch sports. what's your favorite tv show. >> scooby doo. how old are you? four. when i was four, my favorite show was scooby doo too. >> stephen: shocking. shocking that scooby doo is still on the air. although in the new episode when the harlem globetrotters guest star, they're joined by their buddy kim jong-un. well, it turns out christie was full of scooby doo doo and he was exposed by pulitzer prize winning watchdog group politifact who reported given the governor's birthday and the official premiere date of scooby doo christie would have been seven years old not four if he watched the's first episode. ( cheers and applause ). christie was was clearly lying about watching scooby doo when he was four.

and he would have gotten away with it too if it weren't for those meddling kids. mark my words, scooby-gate, trademark, will bring chris christie to his knees faster than a short flight of stairs. rest assured, nation, rest assured, i will get solve this mystery just like my favorite childhood cartoon. inspector gadget. >> inspector gadget came on the air in 1983. you were almost 20 years old. >> stephen: rut-roh. ( cheers and applause ). nation, thanks to the sequester, if you have flown in the last couple of days you may have noticed that you didn't fly in the last couple of days. jim? >> staffing cuts started yesterday for air traffic

controllers. >> here comes maximum pain. air travelers, listen up. your chances of a flight delay just went up. >> federal budget cuts are now hitting air traffic controllers. they are being forced to take extra days off. >> about 400 flights were delayed because of these furloughs. >> passengers have been boarding on time but wait up to three hours for their flights to take off. >> stephen: oh, yes, the sequester chickens have come home to roost. or they would have have if they could get clearance to take off. but we've got no choice, folks. in bad times, you have to slash government sphending. and i don't need some fancy ivy league paper to tell me that. because there's already a fancy ivy league paper to tell me that. the famous 2010 study "growth in a time of debt" by harvard economists ken rogoff and car men reinhart. you've got to think harvard economists understand debt.

almost as much as harvard graduates. so it's no surprise that fiscal conservatives all yes rogoff and reinhart to make the case for drastic budget cuts. >> i had always heard if it gets to 90% that's a tipping point. that's when economic growth starts to slow. rogoff and reinhart showed that. >> if you look at rogoff and reinhart, what they say, you have to consider gross debt where over 100%. >> economists who have studied sovereign debt tell us that letting total debt rise above 90% of g.d.p. creates a drag on economic growth and intensifies the risk of a debt-fueled economic crisis. >> stephen: yes a debt-fueled economic crisis. that would plunge us into another great depression. and drag the entire world down with it.

not only, not only has congress been inspired by rogaine and braveheart's math, their work has influenced international budget slashers like e.u. economics commissioner olli rehn, former european central bank president jean-claude trichet, bundesbank president jens weidmann and lord lamont of lerwick who is not only the former chancellor of the exchequer for the united kingdom but gets killed by larry mary in the next season of down ton andy. of course, the left wing ivory tower academia-holes out there couldn't stand that conservatives like crockett and tubbs here were right so they proved them wrong. >> the economic theory underpinning austerity policies

being followed by governments worldwide may be flawed. that is the allegation made in a study by the university of massachusetts. it claims to have found coding errors on the excel spreadsheet used by the academics who have produced the theory which could invalidate their conclusions. >> stephen: the university of massachusetts found coding errors that invalidate conclusions. nerrrrds! i bet you found them on a friday night with your mom. while the rest of us were going up to the point and drinking p.b.r. i puked in dave con roy's glove compartment. it was a good time. and just look at the poindexter who caught the mistakes. thomas herndon who reviewed their data and immediately spotted a basic spreadsheet error and that they had excluded data from canada, new zealand, australia all countries that are experienced solid growth during periods of high debt and would thus undercut their thesis.

if ignoring new zealand, australia and canada were a crime, everyone in america would be on death row. ( cheers and applause ). now sure, herndon's corrected spreadsheets show that countries with debt over 90% did not see their economies shrink minus point-one percent but instead saw them grow 2.2%. but come on, 2.2% up, .1% down, you say potato, i say eliminate food stamps. for pete's sake, how were ren and stimpy supposed to know that their paper, their paper which has brought austerity to millions was flawed? it wasn't peer reviewed. so, no one needs to fact-check

them. it's not like they said they were watching scooby doo when they were four. after publication in 2010, one economist complained that they refused to share their data. of course they didn't share their data. if they can't use excel, i doubt they could send it an email attachment. but, folks, siegfried and roy are standing by their results saying quote the weight of the evidence to date, including this latest comment by herndon, seems entirely consistent with our original interpretation of the data. right. entirely consistent with their interpretation because no matter how much the results change, the hypothesis must remain the same. that's science. well, folks, now that i know academic papers don't have to be all math-y to make a global impact, i've got some of my own

completely unsupported findings i would like to drop. for instance, hydrofracking makes your ass look better in jeans. crude oil: nature's egret moisturizer. and holster v. bra: how gun control causes man loofer boobs. how gun control causes manboobs. and unlike banger and mash, my studies are pier-reviewed in that i showed them to some sea gulls on a pier. and i can say,. ( cheers and applause ). and i can say with absolute certainty that i did not make a single error in my excel

spreadsheet because for these studies i used "angry birds star wars." bottom line, bartles & james' study is still valid no matter what some punk u-mass amherst e-con grad student named thomas herndon says. and when we return, i will be joined by punk-ass amherst e-con grad stu

( cheers and applause ). >> stephen: welcome back, everybody. thanks so much, folks. you know, folks, before the commercial break, i told you how an academic paper by harvard economist rogoff and reinhart which conservatives worldwide are using to argue for austerity was recently refuted by a u-mass grad student just because it had a few simple spreadsheet errors and a couple of little staggering omissions that made it slightly fundamentally wrong. even worse none of their pie charts contained real pie. here to defend his attack the grad student who has fiscal conservatives' panties in an economic bunch. please welcome thomas herndon. mr. herndon, thanks so much for being here. all right. first of all, why did you do this? who was behind you? george soros, nancy pelosi. who? who assigned you to do this? >> actually it was my professors in my class. it was the term paper for our

project. we had to replicate someone else's paper and learn all the techniques in it. >> stephen: you went to replicate these findings and then what happened? >> well, you know, i tried to build the data myself from all the publicly available sources but i just couldn't replicate their negative average. >> stephen: did you start recalculating? >> i did. it took a couple of emails. they were polite enough to give me their spreadsheet. once i got the spreadsheet, you know, i was able to identify the error pretty quickly. >> stephen: yes, yes. well, it was fine with them for you to have the spreadsheet. >> they told me that feel free to like publish whatever results i had. >> stephen: then you had the balls to actually publish whatever results you had. >> yeah, you know, i thought it was a really important message and really upon story so i wanted the profession to hear about it. >> stephen: when you first saw these, you must have thought i've got to be wrong. >> that's exactly what i

thought. i couldn't really believe my eyes. so i asked my girlfriend who is also a researcher in sociology to look at the spreadsheet with me. >> stephen: why ask her? he's had a lot of fiscal training as well. she's really sharp and pays a lot of attention to detail. >> stephen: did she learn excel spreadsheet? >> that's pretty standard. stephen: seems like that would help. okay. so you have your girlfriend to peer-review your work. and then take it to professors. they said, yeah, yeah, we'll publish this. here's my worry about you, young man. you realize that you have upset some people in the austerity crowd. okay. you know that, right had. >> it's true. stephen: okay. these are very important and sometimes very powerful people who are using the argument of jekyll and hyde over there to, you know, make austerity measures all over the world. do you have someone starting your car for you right now?

>> i'm really lucky that the university has helped me take care of me and spoar me through the whole media process. they take care of me really well. >> stephen: do you think that austerity is the right thing to do? >> no. i think austerity at this time is largely counterproductive. >> stephen: but they're already using it all over europe. they love it so much that they have celebrations in the streets. sometimes with fire and everything. >> it's true. one of the things is, as i've been talking to a lot of the media across the world they've given me pretty heart breaking stories about what is going on in europe. i've also seen the effects of it in this country as well. >> stephen: right. we have to keep cutting the government budget and laying off people until those people get jobs. >> that seem to be the argument. stephen: it is the argument. it doesn't seem plausible to me. i tend to think that if we lay off a lot of people then it's not really good for the economy. then those people can't go out

and participate and buy things. that's really bad for businesses as well. >> stephen: if you're just going to use complicated economic jargon i can't understand, mr. herndon, thank you so much for joining me. here's the paper. thank be right back.

>> stephen: welcome back, everybody. my guest tonight is the executive chairman of google. whatever i learn about him, i will sell targeted advertisers. please welcome eric schmidt.

( cheers and applause ). eric, good to see you. thanks for coming back. this is great. sir, as the people may know, you're executive chairman of google, okay. >> yes. stephen: now you're the author of a new book called the new digital age, reshaping the future of people, nations and business. >> yes. it comes out today. >> stephen: it comes out today. it dropped, as we say in the world of hip hop. now do i actually have to read this? >> yes. stephen: it has the play thing on the front. can i just touch that? does a book download into my brain? >> it's 330 pages of words, no pictures, no diagrams. >> stephen: really? you know, the internet is full of pictures and diagrams. did you bring me google glass? >> no but we can get it.

stephen: seriously. are you a qualified developer. >> stephen: of course i am. what does that mean? >> that means that you can program in java on android. >> stephen: [bleep] yeah. i love java. i have a cup every morning, man. now, did you come here in one of those driverless cars that google has? >> i wish. i will in the future. >> stephen: let's talk about the future because, you know, dghts. >> by the way the driver of this car is the coolest thing. you would love this thing. you get in it and press the button and you drive. it takes 20 minutes to recover from the car driving you, turning, stopping and so forth. >> stephen: recover? what do you mean? take it to recover. >> it takes you to recover. stephen: why does it take me 20 minutes to recover? >> because you're so shocked that the car is driving you. >> stephen: really? yes. stephen: well i already have a car that drives me. his name is hernando. okay. but is this new digital age going to be good?

>> yes. stephen: the answer is yes? yes. stephen: thank you for joining us. the very first sense of this damned book is the internet is among the few things humans have built that they don't truly understand. do you understand the internet? >> i do not. no one does. >> stephen: okay. that was my test to see whether you were human. you pass. you could have been a robot. what do you mean we don't understand the internet? the internet is a series of tubes. of course we understand it. >> that's why we call it you-tube i guess. >> stephen: probably. the internet is a question of what people do and people are not predictable. people do all sorts of wild and crazy stuff. >> stephen: the internet is an agreement. >> no it's a connection of everybody together. and the next few years, five billion people are going to join the two billion of us that are already on it. >> stephen: i'm going to go with agreement. don't correct me on my own damned show. >> in any case when those five billion people show up all sorts of stuff is going to happen.

>> stephen: who are the five billion people and where are they hiding? what do you mean five billion people are going to show up on the internet? >> today they're using dumb phones, feature phones. all of those will get upgraded to smart phones like the ones we all carry. >> stephen: where are these people coming from? >> they all live in the countries they currently live in. >> stephen: don't be coy. where are they? >> africa, asia, america. stephen: was that so hard? i'm going to leave and google these answers if you want. ( cheers and applause ). am i going to have a robot? >> yes. eventually they will be robotic assistants to help you get all your chores done. >> stephen: i have a rumba. that's a small version of a robot. eventually, sure, because computers will do what they do well. they have infinite memory, remember everything.

people will do well with what we're good at which is judgment. >> stephen: i love passing judgment on people. am i going to be anonymous in the future still on the internet? is that going to change because one of the things i love about the internet is nobody gets to know who i am when i'm posting those comments on the yahoo news like, like am i... are people going to know who i am in the future. >> you can have the identities colbert, 1, 2, 3. >> stephen: they would know that's me though. >> it could be somebody enters naturing you. >> stephen: right now i'm puppy lover 42. >> you'll still be able to be anonymous to engage in whatever nefarious acts you're busy doing. you'll have multiple identities because you'll have multiples names and password.

i think puppy lover 42 is taken by you. but there will be other ones as well. >> stephen: can i live forever? yes. stephen: really. not now. stephen: i can live forever but later. so i just have to live long enough for later to become now. >> but your digital identity will live forever. there's no delete button. >> stephen: on me? that is profound. stephen: eric schmidt, thank you so much. ( cheers and applause ). eric schmidt, the new digital age. -x,x,yye,x o$,